Right now a jQuery bug in Konquerer is holding up the issue and jQuery is supposed to be releasing a maintenance release soon.

But feel free to download a latest version of CVS HEAD, apply the latest patch -- (#35 at the time of this writing), and help get the patch ready for Drupal 6. Drupal 6 core code just froze, but there is a 2-3 week window for performance and usability improvements that don't break APIs. And I believe that jQuery upgrade would fall under this umbrella so there is a few weeks window to get it.

Same question. I've looked through the jquery_update module and it looks like it's main purpose is just to test if the included jquery.js has been copies to your misc folder. I think we need to wait for jquery_update to be updated.